#1A POLYMETAL Investor Presentation July 2010#2Cautionary statements This presentation includes forward-looking statements. This is not an offer to sell, or an invitation of an offer to purchase, securities in any jurisdiction These forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The words "believe," "expect," "anticipate,” “intends,” “estimate,” “forecast,” “project,” “will,” “may,” “should” and similar expressions identify forward-looking statements. Forward-looking statements include statements regarding: strategies, outlook and growth prospects; future plans and potential for future growth; liquidity, capital resources and capital expenditures; growth in demand for products; economic outlook and industry trends; developments of markets; the impact of regulatory initiatives; and the strength of competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including, without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, and the Company may not achieve or accomplish these expectations, beliefs or projections. Neither the Company, nor any of its agents, employees or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this presentation. 2#3Polymetal-key facts 2009 Production Gold Silver Gold eq.1 311 Koz (+9% Y-o-Y) 17.3 Moz (+1% Y-o-Y) 0.6 Moz (+5% Y-o-Y) 2009 Revenue US$ 560 m (+12% Y-o-Y) 2009 Co-product Cash Costs (Gold equivalent) 479 US$/oz (flat Y-o-Y) 2009 Adjusted EBITDA US$ 242m (+49% Y-o-Y) 2P Reserves (JORC) 1 Gold eq. 1 14 Moz @ 4.1 g/t Capital Structure Market cap Net debt³ US$ 4.8 bn² (358m shares) US$ 569m © 2010 Polymetal 1 Using 1:60 Ag/Au and 5:1 Cu/Au conversion ratios 2 LSE price as of July 8, 2010. Market cap is calculated without accounting for treasury shares held by Polymetal's subsidiaries (c. 41m). Total ordinary shares account for 399.4 million. 3 As at December 31, 2009 3#4Share price performance: 1 July 2008 - 8 July 2010 IPMTL LI Equity - Last Price (R1) 159.4969 PLZL LI Equity - Last Price (R1) 99.6337 POG LN Equity Last Price (R1) KGC US Equity - Last Price (R1) RTSI$ Index - Last Price (R1) 102.1087. 77.6867 62.2232 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2008 2009 2010 Copyright 2010 Bloomberg Finance L.P. © 2010 Polymetal -180 159.4969 +59% Polymetal -140 -120 100 1007 99.6337 +2% Petropavlovsk 0% Polyus Lon 77.6867 -22% Kinross 62.2232 -38% RTS Index FOU -40 -20 08-Jul-2010 18:33:38 4#5© 2010 Polymetal Hochchild Red Back Mining Petropavlovsk Randgold Resources Agnico-Eagle Mines Eldorado Gold IAMGOLD Corporation EV/oz Reserves 897 867 736 555 Cheap, High-grade reserve ounces 409 401 341 315 283 Centerra Gold Polymetal Polyus Yamana 130 102 Hochchild Agnico-Eagle Mines Using 1:60 Ag/Au and 5:1 Cu/Au conversion ratios Based on JORC reserves. Actual as at February 25, 2010 Polymetal Randgold Resources 8.2 Average reserve gold eq. grade 4.3 4.2 3.5 2.7 2.0 1.7 1.6 1.5 1.4 1.3 Centerra Gold Mining Red Back Yamana Eldorado Gold 5 Polyus IAMGOLD Corporation Petropavlovsk#6Polymetal: Asset portfolio Voro Production: 150Koz Au Reserves: 1.7Moz Au @ 2.8 g/t Dukat Operations Production: 15.6 Moz Ag and 39 Koz Au Reserves: 360Moz Ag @ 405 g/t 0.85Moz Au @ 1.0 g/t Mayskoye Resources: 7.5 Moz Au @ 11.8 g/t Cash costs FY09: US$381/oz of Au Cash costs FY09: US$8.1/oz of Ag Production • Development © 2010 Polymetal St.Petersburg Magadan Yekaterinburg Khabarovsk Kazakhstan Omolon Operations Reserves: 0.7Moz Au eq. @ 16 g/t Resources: 3.7Moz Au @ 3.3 g/t Khakanja Production: 136Koz Au eq. Reserves: 1.1 Moz Au eq. @ 9.5g/t Cash costs FY09: US$463/oz of Au Varvarinskoye Reserves: 1.3Moz Au @ 1.1 g/t 151m lb Cu @ 0.7% Resources: 3.1 Moz Au @ 1.1 g/t 313m lb Cu @ 0.3% Amursk POX hub+Albazino Reserves: 2.3Moz Au @ 4.1 g/t Production numbers are given for the full year 2009 Reserves and resources are as at January 1, 2009 16#7Compelling growth profile Gold Equivalent ounces, Koz 1400 110 1200 200 1100 110 30 110 200 200 160 800 Varvarinskoye 100 90 190 230 Mayskoye 40 605 140 Omolon ops 573 20 150 140 130 131 136 170 Albazino Khakanja 130 130 160 132 150 Voro Dukat ops 420 400 400 360 310 300 © 2010 Polymetal 2008 2009 2010 2011 2012 2013 Using 1:60 Ag/Au and 5:1 Cu/Au conversion ratios 7#8Moving towards gold Revenue Split*,% © 2010 Polymetal 49 4.9 1 5 31 43 51 56 Resource Split*,% 49 2 33 2 33 III 65 65 44 64 51 2008 2009 2013F 2008 2009 Gold Silver Copper Using 1:60 Ag/Au and 5:1 Cu/Au conversion ratios 2013F 8#9• • Q1 2010 highlights 100 Koz of gold produced (+ 54% Y-on-Y) • • Increased throughputs and grades at Voro and Dukat Contribution of a full quarter of Varvarinskoye production 4.9 Moz of silver produced (+12% Y-on-Y) Increased throughput at Dukat • Significantly higher silver grades at Lunnoye and Khakanja • • · Revenue of US$ 175 million (+59% Y-on-Y) Albazino-Amursk construction remains on schedule and on budget Omolon is fully prepared to pour gold in 2010 • • From the heap leach - in June - ⚫ From the CIP plant in August © 2010 Polymetal#10Operations#11Dukat Operations Remaining LOM: Dukat 17 years - Lunnoye/Arylakh - 14 years Q1 2010 highlights • Expanded Dukat plant ramping up to full capacity • Silver production up 6% due to higher silver grades in the Arylakh ore which is currently being processed at the Lunnoye plant • . Gold production up 14% due to increased throughput at Dukat Recoveries at the Dukat plant down due to ramp-up and shortages of fresh water due to freezing of permanent waterways • Underground development at Goltsovoye is accelerating, the mine on track to start ore production from stopes in Q3 2010 © 2010 Polymetal Ore processed (kt) 23% 398 324 65 74 33% 333 250 Q1 2009 Q1 2010 ■Dukat Lunnoye 4.1 4.3 459 426 Q1 2009 Silver production, Moz Q1 2010 Grade, g/t 11.5 10.0 1.2 1.1 Q1 2009 Q1 2010 Gold production, Koz Grade, g/t 11#12Voro Remaining LOM: oxidized ore reserves primary ore reserves 6 years - 15 years • • Q1 2010 highlights Expanded CIP plant operating at full capacity Quarterly gold production jumped 51% Y-on-Y From primary ore (CIP plant) - by 59% • From oxidized ore (heap leach) - by 15% • Mining of oxidized ore form the southern pit is expected to commence in Q2 2010 • 67 Kt of ore was mined at Degtyarskoye and trucked to the Voro CIP plant © 2010 Polymetal 160 Q1 2009 35% 216 Q1 2010 ■Primary ore processed, kt 43.6 28.9 6.9 5.7 111 Q1 2009 Q1 2010 Gold production, Koz Primary ore grade, g/t 12#13Khakanja Remaining LOM: 7 years Q1 2010 highlights • ⚫ Gold production essentially flat • Silver production almost doubled Y-on-Y due to 27.0 26.1 5.8 5.6 • . significant increases in processed silver grades Open pit mining at Yurievskoye has been completed. All ore (160 Kt) has been transported to the plant Viability of underground mining at both Khakanja and Yurievskoye to ensure high-grade feed from 2011 is being estimated • • Exploration drilling is under way at Yurievskoye. Development decision on the underground mine expected in Q3 2010 Key parameters of the underground mine at Khakanja to be determined in Q4 2010 Q1 2009 Q1 2010 Gold production, Koz Grade, g/t 0.55 0.29 202 102 Q1 2009 Silver production, Moz Q1 2010 - Grade, g/t © 2010 Polymetal 13#14Varvarinskoye Ore mined, kt Ore processed, kt Key figures in Q1 2010 735 631 Gold produced, Koz 18.3 1,016 Copper produced, t • Performance is steadily improving with ore grade continuing to be the major driver Key initiatives include • • . Lowering dilution • By adding new drilling and excavating equipment By improved grade control Catching up on insufficient waste stripping by adding new ⚫ miming equipment • Renegotiating key contracts • RC drilling • Blasting · Mining fleet maintenance Gold-copper concentrate off-take agreement Targeted investments in additional mining fleet and cost containment expected to start bearing fruit in the second half of 2010 © 2010 Polymetal 14#15Cash costs (Gold Institute Standard) Dukat & Lunnoye $/oz silver 8.2 8.1 6.6 Voro $/oz gold 420 415 381 Khakanja $/oz gold 442 531 463 illimin 2007 2008 2009 2007 2008 2009 2007 2008 2009 Dukat & Lunnoye $/tonne mill 93 121 112 Voro $/tonne mill 35 35 34 2007 2008 2009 2007 © 2010 Polymetal Khakanja $/tonne mill 113 81 95 2008 2009 2007 2008 2009 15 Gold Silver#16Development projects#17Polymetal's Strategy: Processing Hubs • Financial capital and human capital synergies Risk mitigation Flexibility and long life Management concentration on limited number of projects Creating centralized processing facilities for the treatment of materials from different sources © 2010 Polymetal 17#18Amursk POX Hub • Large amount of refractory ore bodies in the Far East Russia . Processing refractory concentrates from across the Russian Far East • Absence of processing capacity for refractory ores in the region • Very expensive energy and labor in remote areas • Amursk location: -Cheap power -Skilled & stable workforce -Excellent transportation infrastructure © 2010 Polymetal Pevek Maiskoe Bering Sea Nikolaevsk-on-Amur Albazino Amursk POX ~4800 km by sea 112 km Albazino 8 km Nikolaevsk-on-Amur Kherpuchi Oglongi Agnie-Afanasievsky Solnechnyi 571 km Komsomolsk-na-Amure Amursk 18#19Amursk POX Facility ⚫ Capex • Concentrate capacity $US110 million 250 ktpa • Sulfide sulfur capacity 26 ktpa . • Opex 60-80$/t of concentrate (depending on sulfur grade) Oxygen plant Concentrate preparation Acidulation POX autoclave oxidation Neutralization EW of pregnant solution ← CIP processing Metal constructions on site Dry-stack tailing Dore Preparation of autoclave foundation Status: • Engineering completed (SNC Lavalin) ⚫. All major equipment contracted • • The majority of earth works completed, foundation works in full swing • ⚫ Construction of 35Kw power line, gas and water supply pipelines started On track to commission in Q2 2011 © 2010 Polymetal 19#20Albazino . 1.5 Mtpa mine and flotation concentrator on site for a capital cost of US$160 million Q1 2010 highlights • All site infrastructure commissioned • • • Accommodation camp Tailings dam with diversion ditch Diesel-powered genset station • Water boreholes with associated pipelines Crusher and mill foundations completed • Installation planned to commence in May 2010 • Pre-stripping at Anfisa pit continues on schedule. First ore planned to be mined and stockpiled in Q2 2010 On track to commission in Q4 2010 © 2010 Polymetal Flotation concentrator main building (back) and ore preparation structural steel (front) 2.7 *5.5 mill (3rd stage) Foundation for the 3.2*5.5 mill (2nd stage) Reserves and Resources Ore tonnes (Mt) Au grade (g/t) Au (moz) 2P 17.4 4.1 2.3 MI&I 21.3 4.3 3.0 20#21Mayskoye 850ktpa underground mine and flotation concentrator on site for a capital cost of c. US$ 150-170 million. Q1 2010 highlights Underground development in progress • First stopes expected to be ready for production in 1H 2011 • Construction of water reservoir and tailings impoundment in progress Foundation works for the flotation concentrator to commence in Q2 2010 ⚫ Steel required for the construction of the structural steel frame planned • . • To be delivered during the summer 2010 navigation To be installed in the winter of 2010/2011 Results of the FS and reserve statement to be released in Q3 2010 Resources Ore tonnes (Mt) Au grade (g/t) Au (Moz) MI&I © 2010 Polymetal 19.8 11.8 Pevek Maiskoe Nikolaevsk-on-Amur Amurs k POX Bering Sea -4800 km by sea Sea route 7.5 © Deposit Settlement: 21 21#22Omolon Regional Processing Hub • A number of small to medium • size high-grade deposits in the Northeast Magadan region ⚫ Numerous highly prospective epithermal Au-Ag ore occurrences in the region • Existing 850 Ktpa Kubaka mill Q1 2010 highlights Waste mining at Birkachan started First ore to be mined in Q2 2010 . • Truck high-grade ore to the mill Heap (dump) leach low- grade ore on mine sites Stacking of low-grade ore to commence in May Processing of high grade ore to commence in August • Ore mining at Sopka in progress Ore stockpiled, to be trucked and processed in 2H 2011 Earth works for the new Merrill Crowe section commenced Results of the FS and reserve statement to be released in Q3 2010 © 2010 Polymetal Lunnoe Birkach an Kubaka 380 km Oroch Sopika Kvartseva ya Dukat Evensk Dukat 571 km 41 km Magadan wwwww. Road Deposit Settlement 22#23Capital Expenditure, US$ million 250 222 20 TT 19 19 66 40 25 170 ■Varvarinskoye ■Mayskoye 112 123 80 100 110 Omolon ops 20 46 10 40 25 40 23 30 ■Albazino/Amursk Maintenance capital ■Dukat/Voro expansions 25 20 35 40 50 16 18 Exploration 2008A 2009A 2010 2011 2012 © 2010 Polymetal 23 223#24Polymetal Investment Thesis • . Quality assets with strong cash flows from operations Proven development and operational track record Unique strategy focused on processing hubs Strong production growth Strong corporate governance © 2010 Polymetal 24 224#25Appendixes#26Debt level and liquidity • Current net debt approximately US$645 million (as at May 1, 2010) - US$ 30 million of cash - US$ 29 million overdraft facility with Gazprombank (covers working capital requirements) - US$ 387 million of medium- and long-term bilateral loans with Russian banks* - US$ 7 million financial leasing with NOMOS-BANK, final maturity April 2014 - US$ 252 million of Varvarinskoye liabilities maturing in 2013 (35%) and 2014 (65%) • *Breakdown of long-term bilateral loans: • US$ 70 million with UniCredit Bank at Libor + 6%, final maturity Feb 2011 US$ 95 million with Raiffeisenbank at Libor + 5%, final maturity Dec 2011 • • US$ 150 million with VTB at Libor + 6.3%, final maturity Jun 2012 US$ 50 million with Sberbank at Libor + 6.5%, final maturity Feb 2013 • EUR 17 million with NOMOS-BANK at Libor + 5.5%, final maturity 2015-2016 (ECA-covered loans) © 2010 Polymetal 26#27Governance structure Board of Directors Ilya Yuzhanov Chairman, INED Ex-Minister of Russian Antimonopoly Ministry Martin Schaffer Represents PPF Group Leonard Homeniuk INED Committees Audit Committee Chaired by Jonathan Best 3 members Marina Gronberg Represents Mr. Mamut Sergey Areshev Represents ICT Group Konstantin Yanakov Represents ICT Group Vitaly Nesis CEO of Polymetal ex-President of Centerra Gold Ashot Khachaturyants INED CEO of Sberbank Capital Russell Skirrow INED ex-Chairman ML Metals/Mining IB team Jonathan Best INED ex-CFO of AngloGold Ashanti Remuneration and Nomination Committee Chaired by Leonard Homeniuk 3 members © 2010 Polymetal 27 22#28Ownership structure © 2010 Polymetal Mr. Alexander Mosionzhik, 4.4% Polymetal subsidiaries, 10.3% PPF Group (Mr. Peter Kellner), 19.6% Free Float (LSE, MICEX), 31.8% ICT Group (Mr. Alexander Nesis), 18.9% Mr. Alexander Mamut, 15.0% 28#29Track Record and the Pipeline · • • Outstanding track record in commissioning new mines All engineering and construction performed in-house by Polymetal Engineering In-house engineering expertise provides a key competitive advantage 2000 2002 2003 2004 2005 2009 2010 Voro heap leach Dukat Khakanja Voro CIP Khakanja expansion Q3 - Omolon Lunnoye Voro (Dec.) © 2010 Polymetal 2011 Dukat expansion plant re- launched expansion Q4 - Albazino flotation concentrator completed Q2 Amursk POX plant completed Q3 Sopka ore processed at Omolon Q4 - Mayskoye flotation concentrator completed Greenfield projects Brownfield projects 29#302009 M&A activity: 4 deals closed Acquisition Resource, Moz (Au eq.) Full EV, US$m US$/ oz resource Strategic Rationale Goltsovoye 1.1 47 45 Bolt-on to Dukat Sopka 1.4 95 67 Bolt-on to Omolon Mayskoye 7.5 166 22 World-class deposit; strategic fit with Albazino Immediate cash flows. Varvarinskoye 3.8 258* 68 and entry into Total/ Average 13.8 © 2010 Polymetal 566 41 Using 1:60 Ag/Au and 5:1 Cu/Au conversion ratios *With limited (US$90m) recourse to Polymetal Kazakhstan 30 30#31Per share metrics demonstrate substantial shareholder value creation © 2010 Polymetal Reserves (Au eq.), koz/share Resources (Au eq.), koz/share 11% 62% 89 36 39 40 55 59 2007 2008 2009 2007 2008 2009 Using 1:60 Ag/Au and 5:1 Cu/Au conversion ratios 2009 calculated based on 358 million shares. 31